rajbirkohli
New member
Cash Flow Management, also know as cash flow forecasting; is an essential aspect for planning financial management for any business to avoid crisis of liquidity in the future. As an essential tool for financial planning – the cash flow forecast is an important management process, similar to preparing business budgets wherein external stakeholders such as banks may require a regular forecast; if the business has a bank loan, the bank will want to look at the cash flow forecast at regular intervals.
Importance of Cash Flow Management:-
Corporate: Cash flow management is the modeling of a company or entity's future financial liquidity over a specific timeframe. Cash usually refers to the company's total bank balances, but often what is forecast is treasury position which is cash plus short-term investments minus short-term debt. Cash flow is the change in cash or treasury position from one period to the next period.
Entrepreneurs: Entrepreneurs or managers of small and medium enterprises, cash flow forecasting may be simpler, planning what cash will come into the business or business unit in order to ensure that outgoing can be managed so as to avoid them exceeding cashflow coming in. Entrepreneurs need to learn fast that "Cash is king" and therefore they must become good at cashflow forecasting.
Importance of Cash Flow Management:-
Corporate: Cash flow management is the modeling of a company or entity's future financial liquidity over a specific timeframe. Cash usually refers to the company's total bank balances, but often what is forecast is treasury position which is cash plus short-term investments minus short-term debt. Cash flow is the change in cash or treasury position from one period to the next period.
Entrepreneurs: Entrepreneurs or managers of small and medium enterprises, cash flow forecasting may be simpler, planning what cash will come into the business or business unit in order to ensure that outgoing can be managed so as to avoid them exceeding cashflow coming in. Entrepreneurs need to learn fast that "Cash is king" and therefore they must become good at cashflow forecasting.